Chapter 5: Property Passing Outside the Will or Intestacy

Question 1

What is the effect of property passing outside the will on personal representatives?

Answer 1

The property doesn’t form part of the deceased’s ‘succession estate’ for succession purposes and so is not payable to their personal representatives

Question 2

What property passes outside the will/intestacy?

Answer 2

1. Property owned as beneficial joint tenant
2. Life assurance policies
3. Pension scheme if nomination made as to beneficiary
4. Nominated property
5. Life interests in trust property
6. Gifts where the donor has received a benefit

Question 3

How does property owned as beneficial joint tenant pass on death?

Answer 3

The interest in property owned as a beneficial joint tenant passes to the survivor(s).

Question 4

How does property owned as tenancies in common pass on death?

Answer 4

Share passes via the will or intestacy rules

Question 5

How may life assurance policies be held?

Answer 5

On trust for, or assigned to, beneficiaries
Alternatively, a person insuring their own life may express the policy to be for the benefit of their spouse and/or children.

Question 6

Who do the proceeds of a life assurance policy belong to?

Answer 6

The beneficiaries + is payable directly to them (or trustees) on proof of death.

Question 7

What property passing outside the will will not form part of the deceased’s taxable estate for IHT purposes?

Answer 7

1. Proceeds of life assurance policy
2. Pension scheme death benefits in some cases

Question 8

What property can a person transfer directly to chosen beneficiaries on death?

Answer 8

A person may transfer property held in:
- friendly societies,
- the National Savings Bank, and
- National Savings Certificates,
directly to chosen beneficiaries by way of statutory nomination in writing.

If an individual has made a nomination for such accounts, the institution will pay the investment to the chosen nominee.

Question 9

When will provisions relating to nominated property apply?

Answer 9

To deposits not exceeding £5,000

Question 10

How do interests in a trust fund pass?

Answer 10

According to the terms of the trust

Question 11

What property passing outside the will will be subject to IHT?

Answer 11

1. Interests under a trust may be subject
2. Gifts where the donor has received a benefit
3. Jointly owned property